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10 October, 2024

Chainlink, Solana, and Bitcoin: Why Are Traders Feeling Bearish?

10 October, 2024

A Bearish Trend Emerges: Chainlink, Solana, and Bitcoin

As the crypto market grapples with a lingering sense of weakness from last week, recent sentiment data from Santiment reveals a bearish outlook among token holders and traders for some of the leading altcoins. According to their analysis, Chainlink – a crucial middleware solution powering DeFi and NFTs – Ethereum, Solana, and Bitcoin are facing the brunt of this bearish sentiment.

It’s noteworthy that the tokens experiencing this negative sentiment are primarily from the top 10, with the exception of Chainlink, which currently sits outside the top 20. However, Chainlink leads the bearish sentiment rankings, followed closely by Ethereum, Solana, and Bitcoin, securing spots within the top 5.

Chainlink’s Struggle Despite CCIP Success

While Santiment hasn’t explicitly stated the reasons behind the bearish sentiment, there are underlying factors contributing to this outlook. Despite Chainlink’s dominant position in DeFi through its Oracle solution and the innovative Cross-Chain Interoperability Protocol (CCIP), the token is struggling to gain momentum. LINK, its native token, reached a peak of $22, falling short of its 2021 highs and currently down 53% from its 2024 highs. Given its role in DeFi and NFTs, holders anticipated the token to outperform the market, especially after the launch of the CCIP solution, which has found acceptance among prominent DeFi and TradFi platforms.

Ethereum’s Disappointing Performance

The bearish sentiment surrounding Ethereum could stem from a sense of disappointment following the approval of the first batch of spot Ethereum ETFs. Unlike Bitcoin, whose price surged to $74,000 after the approval, spot Ethereum ETFs haven’t seen similar success. As of October 10, Soso Value shows that all issuers in the United States collectively manage just over $6.6 billion. Additionally, substantial outflows from Grayscale’s ETHE are putting immense pressure on ETH prices. This second most valuable coin continues to trade below $2,800, displaying sideways movement, potentially indicating distribution.

Solana’s Struggles as Meme Coin Momentum Fades

Solana, too, is facing pressure. The success of Pump.fun, which saw the deployment of countless meme coins, supported Solana’s prices. However, as Tron gains market share, this momentum is fading, negatively impacting Solana’s price performance. Moreover, in the coming months, FTX trustees will distribute nearly $16 billion worth of assets to victims. While some might choose to hold their assets, others will likely liquidate, posing a potential negative impact on Solana.

As the crypto market navigates these challenging currents, the bearish sentiment surrounding Chainlink, Solana, and Bitcoin remains a significant factor to monitor. It remains to be seen how these tokens will respond to the evolving market dynamics in the weeks and months to come.